Electric vehicles are getting more expensive because raw material costs have more than doubled to $8,000, research finds

·2 min read
A Tesla Model 3.
A Tesla Model 3.David Zalubowski/AP
  • The cost of raw materials needed to make electric vehicles is rising.

  • The average cost in raw materials is now around $8,255 per vehicle, according to consulting firm AlixPartners.

  • EV manufacturers including Tesla have increased the price of their cars.

The cost of producing electric vehicles is soaring, according to new research from consulting firm AlixPartners.

The average cost of raw materials — including the cobalt, nickel, and lithium needed to make EV batteries — is now around $8,255 per vehicle, the research said.

That cost represents an increase of more than 140% from the $3,381 in raw materials it cost to make an electric car in March 2020, according to CNBC.

The cost in raw materials needed to produce an EV is now 125% more than the raw material cost of a comparable internal combustion engine vehicle, according to AlixPartners.

High raw material costs come amid ongoing supply chain disruptions across the EV industry. The war in Ukraine has helped push prices even higher given Russia is a key exporter of some of the metals used in the production of battery cells.

Many EV manufacturers are increasing the price of their cars, partly because of the rising cost of raw materials.

Tesla has enacted price hikes across all models, with the cost of a Model X rising as much as $6,000, Insider's Bea Nolan previously reported. The electric car giant has also been struggling with supplies of computer chips as a result of ongoing supply chain issues and staff layoffs.

Ford and EV startup Rivian have also increased the cost of their vehicles. Ford previously said the rising cost of raw materials had hampered profitably, multiple outlets reported.

AlixPartners predicted that the supply chain constraints and pent up demand for electric vehicles pushing up the cost of the cars would continue through to 2024, the report said.

Interest in electric cars has increased as a result of high gas prices, but the rising cost of electric options is putting the vehicles more out of reach for many ordinary consumers.

According to the car-buying site Edmunds, the average price paid for a new EV hit $60,054 in February. That price spiked to $60,984 in May, Bloomberg reported, citing Edmunds.

Read the original article on Business Insider

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting